Speech to the Nelson Seriously Asia Workshop

Welcome to the Nelson
workshop, part of Asia 2000’s Seriously Asia project.
What I want do today is to explain what this project is
about and how you can help us reach our goals. I also want
to underline how important it is that we should reach them.

I realise that many of you here know why Asia is
important. But just to reinforce the point, I thought I
would paint a hypothetical picture that illustrates why we
need to work harder at unleashing the energy of New
Zealand’s Asian links.

But first of all what is Seriously
Asia?

New Zealand’s economy is strongly linked to
Asia: - 35% of trade - one third tourism revenues
- 80% international education sector- nearly 20% of
total inward investment

For New Zealand the importance
of Asia to New Zealand cannot be overestimated. Based on my
‘back of the envelope’ calculations, the value of New
Zealand’s links with Asia are equivalent to just over one
fifth of the New Zealand economy when you take into account
exports and imports to and from Asia, export education
revenue and tourism.

It is interesting to note too that
the Maori economy, which makes up 1.4% of NZ’s total
economy, is more significantly open to the rest of the world
than the New Zealand economy as a whole. And that openness
includes Asia of course.

This exposure is driven by deep
Maori involvement in the fishing, forestry, tourism, and
agricultural industries. In the fishing sector for instance
20% of NZ's quota is jointly controlled by two Maori
businesses, Sealord and Moana Pacific Fisheries. In
agriculture, Maori agricultural output is estimated to be
about 7.4% of the NZ total. Both sectors are high export
earners for NZ, especially in the Asian region.

Those of
you who are already dealing with Asia will know the
importance of this region to New Zealand’s future. If anyone
has any doubts imagine what New Zealand might be like
without one fifth of its economy.

A very bleak picture
would be painted if New Zealand cannot maintain, let alone
increase, the ‘Asian’ share of the economy. Already we are
concerned about not being in the top half of the OECD growth
table. Without one fifth of our economy we would be worrying
about being on the growth table at all.

If we are not
earning export dollars from the Asian region we cannot spend
on imports either. And imports from Asia have improved the
quality of daily life for virtually every person in the
country.

I am not just talking about cheaper cars from
Japan. I am also talking about the household savings that
have resulted from high value clothing and house wares from
China, and electronic goods from Malaysia or Korea. While we
may be able to source similar products from other countries,
they would be from less efficient suppliers and would not
provide shoppers with the same kind of value for money.

Other impacts would come from the loss of tourist spend.
Many hotel industry chains are Asian owned and many Asian
tourists fill their rooms. Without these tourists, who
brought in one third of all tourism revenue last year, NZ
jobs would go. A rough calculation is that for every dollar
an Asian tourist brings in there is a multiplier of around
four, and a good proportion of those four dollars are spent
in regional economies.

There is a similar story with
respect to international education receipts – valued last
year at over one and a half billion dollars. Many student
dollars have been spread around public utilities such as
transport, home-stay households and small businesses. And
the students have also had a significant impact on the
tourism sector. According to an Australian study, every
student provides a reason for four other visitor
arrivals.

Our wool industry’s fortune is dependent on
whether China is buying wool or not, and when it does not
our wool receipts plunge. A similar Asia factor holds true
for other industries represented so well here in Nelson,
such as seafood, horticulture and forestry.

The lesson
from this picture is very simple. It is very much in New
Zealand’s interests to look seriously at its engagement with
the Asian region.

This is not simply for defensive
reasons. The one fifth of our economy that Asia now
represents can develop further and faster because Asian
economies continue to outstrip the world in terms of growth.
While world GDP grew 1.7 percent last year, East Asia and
the Pacific grew at 6.7 percent. The projected growth for
East Asia (excluding Japan) is 5.6% for 2003, and Japan
itself (the world’s second largest economy) has also
returned to growth.

Despite this economic dynamism in our
own part of the world, the paradox is that the value of NZ
exports to Asia fell 12% in the year to June 2003. It is
a fact that we need Asia more than Asia needs us!

We need
to ask ourselves whether oversimplified or outdated
perceptions of Asia are putting at risk both present gains
and future opportunities. New Zealand gained an idea of
potential impact following the financial crisis of 1997. The
number of tourists from Korea plummeted, and there were
similar declines in students from Malaysia and other
origins. There was a smaller parallel experience with last
year’s SARS outbreak.

While these impacts resulted from
external events, there are times when we need to ask
ourselves what we can do to avoid shooting ourselves in the
foot closer to home.

I was appalled to read in the NZ
Herald about recent coverage of New Zealand in overseas
Asian media. An internet newsgroup (soc.culture.japan)
reportedly described NZ as ‘the most racist nation in the
South Pacific’. In China, the country of origin for up to
40% of our international students, the semi-official
People’s Daily with a circulation of 3 million, reported
that young Asian students in NZ are getting hooked on crime
and that at least 20 have died in the last 6 months.

Of
course there is an argument as to whether such claims are
accurate, but the mere fact that a popular image of this
kind is being put into the minds of crucial partners is very
concerning indeed. It is particularly concerning when you
consider the power of word of mouth in shaping decisions on
tourism and educational outcomes.

There is a very tight
linkage between trade, investment, tourism and education and
the bottom line of all of them is contained in that Asian
keyword “relationships”. How is it that sufficient
misunderstanding has arisen in our relationships that images
such as those reported by the NZ Herald can even begin to
exist?

In response to such negative media coverage
Education Minister Trevor Mallard led a mission to Beijing
last week to reassure Chinese leaders of the quality of New
Zealand’s education system and the pastoral care systems
which have now been put in place.

In other news, New
Zealand was voted the top holiday destination by one of
Britain’s top travel magazines, for the third time in a row.
That is very fine, of course, but the number of visitors
from Asian origins is twice the number of those from
Britain.

This includes not only established markets like
Japan, new markets like Korea and China, but also emerging
markets like India. Last year we had over 17,000 visitors
from India, a market that has huge potential and from which
high growth rates are expected. Are we prepared for the same
kind of learning curve we experienced when visitors from
Japan first started to arrive in numbers?

For New Zealand
the Asian region is the ‘new world’ as we ourselves used to
be, and our challenge is that we do not yet know enough
about this region, its culture, peoples, history, languages
and societies.

Having Asian knowledge is becoming
imperative as we watch the region develop at an astounding
rate and as Asia increasingly touches New Zealand’s shore in
the form of residents, students, investors, traders and
tourists - and as we eat sushi, sleep on futons or use a
dryer made in China.

Asia is no longer ‘out there’ it is
increasingly part of New Zealand. I recently saw a homemade
poster on a university pin-board. It read “Future Proof your
Degree – Include Asian Studies”.

New Zealanders will
continue to engage more closely and deeply with a region
situated on our doorstep. We must recognise that Asia is
more than just China, that opportunities exist in countries
such as Vietnam and India, that there are differences
between and within each country, and that the word ‘Asia’,
while a useful shorthand, actually conceals more than it
reveals.

Those of you here already involved with Asia have
important knowledge about the cultures and traditions of its
countries, how business operates, and about how
relationships are created and maintained. Such knowledge
could be shared to the significant benefit of New Zealand’s
emerging traders. If each established trader mentored
another business wishing to engage with Asia, and they once
established mentored another business, you could make a real
difference.

Another means of sharing knowledge is your
participation in this workshop today. You are here because
you are either already dealing with the Asian region or you
want to. You are here to tell us your experiences, and to
tell us what would make engagement easier or better for you.
I am looking forward to learning from you and welcome the
opportunity of sharing our Seriously Asia
project.

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